By all measures, the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) signed into law last month is a massive, once-in-a-generation outlay. But as history shows, the consequences of such massive federal outlays have been the inequitable distribution of benefits by race as well as the burdens of their resulting projects. Interstate highway construction in the early 1960s, for example, cleaved through predominately Black neighborhoods in Houston, New Orleans, and Nashville, Tenn.

Today, policymakers are acknowledging that racial inequities were built into our public infrastructure, with talk about “reconnecting communities” divided by highways, upgrading harmful and antiquated water and energy services for homes in underserved places, and providing new critical infrastructure systems for all communities’ access. Some federal programs are already integrating equity, such as the Flood Mitigation Assistance program’s vulnerability scores. And on his first day in office, President Joe Biden signed an executive order on racial equity and underserved communities, followed by the “Justice40” executive order, which seeks to deliver 40% of overall benefits from relevant investments to disadvantaged communities.

Ultimately, however, these are administrative rules, not law. So, the question remains: Unlike the massive federal expenditures of the past, does the new infrastructure law cement racial equity into our built environment?

Unfortunately, the IIJA does not radically move the equity conversation down the road. On the whole, it funds business as usual, with continued funding for traditional infrastructure (like highways) that have caused problems before and no explicit references to Justice40. In this piece, we’ll examine seven ways in which equity is not prioritized in the IIJA, and how these potholes could be avoided as program rules and project selections roll out over the next five years.

The importance of ‘naming names’ when it comes to targeted investment

The IIJA primarily adds funds to existing federal programs, most of which rely on past requirements such as environmental reviews and perfunctory community input when it comes to equitable investment in historically disinvested places. In a few cases, the IIJA sets aside specific funding streams for geographic jurisdictions that directly invest in marginalized communities—specifically, tribal lands. New investments are also going to specific places (such as rural communities) that indirectly support certain racial groups simply because of local demographic patterns. And a few place-based funds in the IIJA indirectly address equity; for example, increasing the Superfund and Brownfields remediation programs invariably help those sites’ neighbors, who are typically low-income households or households of color.

Finally, other programs’ funds that are distributed to states already consider disadvantage at the household level, such as the existing home weatherization assistance program and the broadband connectivity assistance. The IIJA’s new “digital equity” funds don’t name racial equity as a goal, but require states to assess broadband gaps that likely reflect race-based disparities. While these set-asides are helpful, they obviously don’t cover all communities in need and don’t address the health, financial, and social burdens that the toxic sites and concentrated disinvestments originally caused.

In the past, the federal government has named names when it comes to disinvested communities, directly providing investment incentives in specific places as recently as the Opportunity Zone program. Naming the people and places in need is a first step in stopping further harms and repairing past ones.

The lack of such targeted and transparent earmarks is the most fundamental oversight in the IIJA. Consequently, committed state governments must now look for every opportunity to identify disinvested communities relevant to each provision’s implementation, starting with programs that are directly controlled by the federal government, such as the Army Corps of Engineers.

States aren’t obligated to use formula funds in disinvested communities

The majority of IIJA funds go to current and new funds that are provided to states through established criteria or formulas. There are about $3 in formula grants to every $1 in discretionary and competitive grants. Ninety percent of the highway fund—the biggest single pot in the IIJA—is given out in formula grants. The formula for the clean water and drinking water revolving funds that received a $23 billion infusion is based on periodic water quality assessment, and the new $15 billion for lead service pipe replacements is similarly apportioned.

States such as California and New York have created definitions for “environmental justice communities” to identify specific geographies (or at least formulas and criteria for geographies) to move pots of their own state monies directly. Yet, even there, there is no clear commitment to funnel IIJA resources as well. There are few or only minimal statutory requirements for prioritizing or considering equity in the projects states select for their apportionment. For example, the new lead service pipe funds specify only that priority be given to assisting disadvantaged communities that are defined by affordability criteria that each state gets to establish itself. Other newly apportioned grants, such as those for broadband infrastructure and electric vehicle charging networks, have similarly ambiguous targets for prioritizing investments and equitably allocating them to communities in need.

Without the sticks of rigorous and explicit statutory requirements on how states can use the funds, states may not even consider equity when selecting their projects—as what happened recently with large block grants in the American Rescue Plan. Consequently, federal agencies will need to monitor states’ project selection and encourage them to prioritize equity-promoting projects and processes.

Competitive grants must be refined with extensive equity requirements

Competitive grants have always proven more flexible for project ideas that respond to specific needs, such as focusing on historically disinvested communities. A handful of the IIJA’s new competitive grant programs are designed with equity in mind; the Reconnecting Communities program, for example, is designed to rectify past harms from highway construction. Programs for “healthy streets,” EV charging grants, and passenger rail corridors note the importance of prioritizing low-income communities. For new funding streams, the program rules are already evolving.

However, most of the bill’s competitive grant programs have surprisingly lukewarm equity statutes, some of which are weaker than what federal agencies are currently proposing. In most cases, the act leaves it to the administering agencies’ “consideration” to determine how much priority to give to equity-driven proposals.

Fortunately, there are many ways to leverage this type of grant to encourage competition in prioritizing disinvested communities. Available grant values or federal shares could increase for proposals with direct community benefits. Proposal review and scoring rubrics should be weighted to prioritize disinvested communities. Requiring authentic community engagement—and evidence of it—in proposal narratives and subsequent awards should be standard. Finally, grant administrators can simply ask proposals to make the case for how disinvested communities will benefit or be directly served.

Safeguards should also be placed against using disinvested communities to leverage other, less needy beneficiaries. The quality of the carrots matter as much as their size.

Build local capacity in disinvested places, including their public and private players

Since the IIJA gives proportionally fewer dollars to competitive grants than entitlements, there is less of an incentive for underperforming jurisdictions to try for competitive grants—especially with additional proposal requirements. In the past, states have passed on these opportunities often in disservice to their own communities.

Low-capacity communities have less wherewithal to develop and propose projects that could be considered for entitlement funding or developed into a proposal for competitive grants. Many county and city governments simply do not have the government administrators that can perform the necessary range of activities, from community engagement through project development and, later, to project administration and reporting. There is also likely to be a dearth of professional talent as many rush to high-capacity jurisdictions with cutting-edge projects. All these factors make it less likely for disinvested communities to be prioritized or for inequitable conditions to be innovatively addressed.

Using program management funds in both formula and competitive programs, federal agencies could provide extensive technical assistance programs targeted at low-capacity communities to help them advance community-driven, technically feasible projects and prepare competitive applications. Most agencies have either existing assistance and guidance staff or operational funds to work with communities on engagement strategies and programming, and can potentially bring in experienced peers from other jurisdictions to support public servants in disinvested communities.

Federal agencies should also get creative about addressing the local professional gaps in these places. Bringing in global experts to help disinvested places—similar to what the Department of Housing and Urban Development did in the Rebuild by Design competition for Hurricane Sandy-damaged communities—could harness expertise with civil sector resources. Finally, administrators could think about using discretionary funding streams to support new and retired engineers to serve as project leads and advocates for communities, ideally from similar backgrounds to those communities.

Economic development should be better integrated with equitable workforce opportunities

Businesses in disadvantaged communities are not neglected in the IIJA, which solidifies the Minority Business Development Agency and establishes several new business center programs, advisory councils, and grants to nonprofits that serve minority businesses. Ensuring that these efforts translate to state and local bidding opportunities will be a critical task, and one that needs almost immediate action as IIJA bids roll out from states.

On the worker development side, however, the IIJA sows fewer seeds of equitable change, aside from commissioning a few studies and advisory boards for identifying ways to include underrepresented groups in transit, transportation, and energy workforces. Federal grantees can create local hiring preferences but are not required to go beyond current statutes and rules, and the tweaks and modest funds to worker training programs generally do not reference opportunities for underserved communities. Finally, most jobs the IIJA creates are subject to prevailing wage requirements and other labor organizing supports, though the relevant unions’ relationships with communities of color have been mixed.

Despite the focus on jobs in the act’s title, there is no guarantee of racial equity in the resulting jobs. Federal agencies should encourage local community benefits agreements for individual projects—particularly competitive grants—as well as showcase examples in which diverse worker programs and procurements combine to produce infrastructure that positively benefits disinvested communities. Existing worker training and apprenticeship funds should also better channel underrepresented people into the jobs that are opening soon.

Equity studies are needed, but we shouldn’t wait to act

The IIJA commissions several studies on the disparate effects of past and newly funded infrastructure projects on neighborhoods of color and low-income communities. Some of these studies are absolutely needed to provide evidence for future policymaking, such as the analysis of small and disadvantaged communities’ clean water.

In many cases, though, there are independent academic inquiries and existing federal data resources that have already given preliminary evidence of disparities. These could be harnessed immediately for action and grant monitoring. Further, federally funded research should also prioritize scholars at historically Black colleges and universities and other researchers of color.

The value of investments must meet the challenge

The biggest equity pothole by far is not within the IIJA itself. It is whether the amount of money meets the need, including the full social and economic costs of past disinvestment as much as the engineering capacity gaps of future infrastructure. Budgets for many of the equity programs in the IIJA were significantly downsized during negotiations.

Ultimately, $1.2 trillion is nothing to sneeze at, and new public investment is welcome after years of disinvestment and neglect. But if we want to ensure prosperity for all in the future, the IIJA is only a down payment on the debt that is owed to communities who have been denied resources. Policymakers at all levels of government will need to work to ensure that equity is cemented into both the projects that are implemented and the process by which that implementation takes place. Equity requires constant building—in this case, literally.

      

Last week, baristas at a Buffalo, NY Starbucks voted overwhelmingly to unionize, creating the first unionized Starbucks store in the US. The union victory came despite Starbucks fighting tooth and nail to thwart it. Amazon took the same aggressive anti-union approach in Bessemer, AL earlier this year; the National Labor Relations Board has since thrown out the results of the vote due to Amazon’s “dangerous and improper” messaging.

It’s called union-busting, and those are just the highest-profile recent examples. Companies tell shareholders that the millions of dollars spent on anti-union consultants, anti-union training, and even store closures ultimately save them money. But that may not be true, especially now. With workers quitting jobs at record rates and employers struggling to hire, unionized companies have a major competitive advantage: their workers stick with them. In this labor environment, union-busting may be the wrong business strategy.

By driving employee retention, unions can be good for business—particularly when the labor market is tight

Many people know unions are good for workers. Union members earn 11% more than nonunion peers, and unions help secure critical benefits such as paid sick leave, health and safety protections, and job security. What is less well known is that unions can be good for business too. It’s true that higher wages and better benefits can be costly for employers if not accompanied by higher productivity. But unions also make employees less likely to quit their jobs. A combination of better pay and benefits, more upward mobility, and the ability to exercise voice gives unionized workers reason to stay.

Employee retention is critical right now, with job quits at historic highs and millions of roles unfilled. Even in a normal labor market, the cost of replacing a single low-wage worker is around 20% of annual pay; that includes direct hiring costs and the lost productivity that comes with turnover. At a company like Amazon, which has an employee turnover of 150%, that can add up to billions of dollars each year.

As long as new hires are plentiful, a low-pay/high-turnover model can be profitable. But today, new hires are not plentiful. High-turnover companies are understaffed, taking a heavy toll on operations and profits. Starbucks has had to reduce hours at certain stores due to insufficient labor, while Macy’s is sending corporate employees to cover shifts in stores.

This may be the new normal. It is now clear that the labor shortage was not caused by generous temporary pandemic unemployment insurance. Instead, researchers point to a newfound unwillingness to tolerate low pay and poor working conditions; a lack of access to childcare, which keeps many mothers at home; concerns about getting Covid; demographic trends, including an aging population, many of whom retired early; tight immigration policy; and, increasingly, mounting disability due to long Covid. The overall labor force participation rate—the percentage of the population working or looking for jobs—is shrinking. Absent a dramatic change in immigration policy, Long Covid healthcare, or support for working mothers, experts agree that hiring is likely to remain a challenge in the future.

Financial performance at Amazon and FedEx, versus UPS demonstrates the value unions can bring

What will this mean for businesses? Recent financial results from the country’s best-known delivery companies give us a preview. Unionized UPS had a very strong third quarter. Operating profit was up more than 20% year-on-year, and the company raised projections for its full-year results. When investors asked CEO Carol Tomé about the labor shortage, she seemed genuinely unconcerned: “I feel really good about our ability to manage through the labor cost inflation that many companies are struggling with today.”

Nonunion FedEx and Amazon did not fare as well. The labor shortage cost FedEx nearly half a billion dollars, primarily in lost productivity due to understaffing. Profit declined on a year-on-year basis, and the company lowered its financial projections. Amazon incurred $2 billion in additional hiring costs and lost productivity, and anticipates spending twice as much in the fourth quarter. In large part due to these costs, Amazon’s profit declined nearly 50%. Stock prices at both companies dropped. “The impact of constrained labor markets remains the biggest issue facing our business,” FedEx’s president, Raj Subramaniam, said.

How much do UPS’s unions contribute to its success? Well, they have secured some of the highest wages in the industry for their drivers: $36 an hour on average. And annual wage increases are guaranteed by a multiyear collective bargaining agreement. This gives UPS drivers good reason to stay on the job, and their average tenure is 16 years. Low turnover reduces UPS’s need to hire and gives the company operational stability.

Amazon and FedEx offer lower pay and less upward mobility. Both use contract drivers; a 2018 analysis found that Amazon Flex and FedEx drivers earned around $5.30 and $14.40 per hour, respectively, compared to UPS’s then-rate of over $23. At Amazon warehouses, new hires earn an average starting wage of $18.50, but because there is so little upward mobility, $18.50 is also the company’s average wage. Unsurprisingly, Amazon appears to have much more trouble recruiting and retaining employees than UPS, leading to higher costs despite their lower pay.

Companies that embrace the benefits of unions may have a competitive advantage in this new era

We are not so naïve as to think business leaders at Amazon, Starbucks, or elsewhere will welcome unions with open arms. Companies will continue to assume they can retain employees without unions—after all, nonunion Costco has employee turnover of less than 15%. But in practice, Costco is an outlier; most companies find it hard to prioritize the investments and work required to get employees to stay.

So as the cost of turnover continues to rise, and as today’s labor shortage becomes tomorrow’s norm, the cost-benefit analysis of union-busting should change. Having a union may actually save a company money—particularly if management and labor can work together productively, as at UPS. Starbucks, meanwhile, has an opportunity to test this hypothesis, by closely tracking performance at their newly-unionized store, and any that follow. Companies with the foresight to move in this direction may be the big winners of our new era.

      

Like millions of frontline workers around the country, Lisa Harris, a cashier at a Kroger grocery store outside of Richmond, Va., will bring home a larger paycheck this holiday season. For the first time in her 14-year career at Kroger, Harris finally earns more than $15 per hour—about $1.50 more than she did before the COVID-19 pandemic began. But despite the pay bump, Harris doesn’t feel she is getting ahead. 

“My money isn’t going as far,” Harris told us in November, reflecting on the impact of quickly rising prices like gas and food. “It isn’t sustaining my day-to-day life. But also, my job is harder. We are extremely understaffed. I am being asked to do more people’s jobs than I already was before…Morale is on the floor and people are threatening to quit.”

Media coverage about how American workers like Harris have weathered the pandemic offers mixed messages. Frontline essential workers have endured tremendous risks and made significant sacrifices to keep the country running during the pandemic, often for low pay. But in recent months, things have started to look up. Wages have risen, at least nominally, for many workers in supermarkets, warehouses, stores, and restaurants, and workers seem to be gaining leverage over employers. However, inflation—which is now the highest it’s been in nearly 40 years—is taking a large bite out of those raises and frontline employees are quitting their jobs at historic rates.

So, are frontline workers better off economically today than when the pandemic began? And if they are, is “better” even good enough for what they deserve?

To find out, we analyzed wages for U.S. hourly workers at 13 of the largest and most profitable retail, grocery, and fast food companies in America. (We conducted this analysis as part of a larger report on frontline workers in the pandemic economy, forthcoming in early 2022.) The 13 companies are all household names and among the most influential employers in their industries; together, they employ nearly 5 million U.S. workers. Using company-wide pay policies, we calculated the nominal and real (inflation-adjusted) change in average pay at each company between January 2020 and the end of October 2021. We confirmed the data through direct company communications.

Inflation has erased at least half of the average wage gains for frontline workers

We found that nominal pay (not factoring inflation) did increase, sometimes significantly, at all but two of the 13 companies. But inflation has erased most of the average gains. Since January 2020, inflation has risen over 7% through October 2021, and nearly 8% through November 2021. Over nearly two years as workers faced a global pandemic, the average wage increase, in real terms, at the average company we assessed was only 3% through October. (Assuming the 13 companies did not raise wages further in the last month, the average wage increase would have been just under 3% through November.) Without inflation, as measured by the Consumer Price Index, the average pay increase would have been 10%.

In assessing the magnitude of raises, it is helpful to compare them to industry average gains for all workers: 5% in inflation-adjusted terms between January 2020 and October 2021 in leisure and hospitality and 2% in retail. At six of the companies, wage increases were substantial even after adjusting for inflation, ranging from 7% to 10%. But at the remaining seven companies, real wage gains were small or even negative. (Gap, Lowe’s, and Best Buy may have raised wages in some specific locations or for specific positions, but our methodology was not able to capture more localized gains.)

Inflation has forced workers at many companies to count their real hourly wage increases in pennies

Another way to look at these wage increases is in hourly terms after adjusting for inflation:

Consider Kroger: The company raised its average hourly wage from $15 per hour in early 2020 to $16.25 per hour in October 2021, a difference of $1.25 per hour in nominal terms. However, due to inflation, a Kroger worker would need to earn $16.08 in October 2021 to have the same buying power as she did earning $15 per hour in January 2020. As a result, the real pay increase for Kroger workers is just 17 cents an hour through October.

Over the course of a month, this difference adds up. For a full-time Kroger employee working 36 hours per week, a $1.25 per hour nominal increase equates to a monthly increase of $180. Adjusted for inflation, the real monthly pay increase for this Kroger worker is less than $25.

Most frontline workers are still not earning enough to get by

Headlines about rising wages for frontline workers—even rising real wages—often obscure the reality that wage levels are still low. In today’s inflationary environment, even as wages rise, so does the minimal threshold for an acceptable wage level. Inflation has increased the cost of day-to-day needs like food, rent, gas, and utilities. As of October 2021, the “living wage”—the wage that allows a full-time worker in a household with two working adults and two children to afford just the most basic necessities, with nothing left over for saving—was $17.70 per hour nationally, after adjusting MIT’s 2019 living wage for inflation through October 2021.

Of the 13 companies we analyzed, only Amazon pays an average wage that meets this subsistence standard. Not one of the companies pays a minimum wage that meets the living wage standard and ensures all employees can afford basic necessities.

And that is using the living wage for a full-time worker; a part-time worker would have to earn a lot more per hour to cover monthly expenses. The three fast food companies we looked at offer most of their workers only part-time hours; at the other companies, up to 40% of workers are part time. This means that the majority of employees at these companies have little chance of earning enough to support their families’ basic needs.

For instance, Chipotle has garnered positive media coverage for raising pay. The company’s real wage increase of 9% is the second-highest among the 13 companies we analyzed. But this increase was from a low base: Chipotle’s minimum rose from just $9 to $11, while its average hourly wage rose from $13 to $15. At the new $15 average hourly wage, a Chipotle employee working 25 hours per week—the hours worked by the median Chipotle employee in 2020—would take home less than $20,000 a year, which is only about half of the annual income required for basic survival. A Chipotle employee earning the company’s minimum of $11 per hour and working 25 hours per week would earn less than $15,000 a year—an income so low it would put a household of two under the federal poverty line.

We have a shortage of good jobs, not a shortage of workers

“COVID just underlined that we were underpaid and still are underpaid,” Lisa Harris, the Kroger cashier outside Richmond, told us. She described seeing colleagues pay for their own groceries with food stamps, despite the pay bumps. Harris said the low pay is the main reason her colleagues are thinking about quitting—and she understands why.

“I love seeing my customers and my coworkers,” she said. “I like serving my community. I want to be there when times are hard, which is why I am still there. But it is making it hard when you can’t provide for yourself. You feel like a failure when you can’t provide. It makes you question whether this is the right career for you even when you love what you do.”

After all the sacrifices, risks, and burdens that millions of frontline workers have endured over the past 20 months of the pandemic, many workers are earning more than they did at the start—but by much less of a margin than many of us assumed. Too few are earning enough money just to get by. Perhaps we should not be surprised, then, that workers are quitting their jobs at historic rates. Our analysis suggests that, at least at these 13 companies, the shortage is not in the availability of workers, but of good jobs.

      

Since April, over 1,000 Alabama coal miners have been on strike. The workers say their employer, Warrior Met Coal, has denied them fair wages, good insurance, and reasonable work schedules and conditions, all while paying millions of dollars in fees to Wall Street firms and bonuses to upper management. Since 2016, when Warrior Met Coal took ownership of the mine, workers have seen lower hourly wages, less paid time off, and decreased medical coverage, and both tenured and new employees lost their pensions. Despite various hurdles, the miners’ union is prepared to continue its strike as an expression of workers’ constitutional rights.

The Alabama strike is just one of many recent labor disputes across the country, including those at Kellogg, John Deere, Nabisco, and Kaiser Permanente—leading some pundits to dub this past October as “Striketober.” Meanwhile, worker wages were up 1.5% in the third quarter of 2021 (with an 8.1% increase for restaurant, bar, and hotel workers and a 5.9% increase for retail workers), and record numbers of workers are quitting based on their confidence that they will find better jobs—a phenomenon some are calling “the Great Resignation.”

All these trends signal a surge in worker power across different industries. But ironically, workers’ newfound leverage may accelerate an impending threat to their jobs: automation. It’s vital, then, for workers to use the current moment to press for long-term protections to secure their careers and livelihoods.

Why workers have leverage right now

There are at least two causes for newfound worker leverage. First, employers are in dire need of workers, and have raised wages as a result. While roughly 10 million people are needed to fill both low-wage and high-skilled positions, only 8.4 million Americans are actively searching for jobs. The political right blames expanded unemployment benefits and stimulus checks for the labor shortage; the left blames low wages, poor working conditions, and widespread worker burnout.

The language of “labor shortages” is politically charged and often misses the complexity of how job openings, separations, and quit rates differ across various industries. Nevertheless, it is true that the weirdness of the current economy (Moody’s chief economist called it an “Alice-in-Wonderland job market”) tilts in favor of workers, as many employers are forced to improve wages and benefits to avoid being short-staffed.

A second key factor in boosting worker power is the amount of household savings produced through stimulus checks combined with less spending on travel and other large expenses during 2020. This has led to upticks in monthly disposable income and household net worth for households in each quintile, with Pew reporting that personal income in the second quarter of 2021 is up “an annualized inflation-adjusted rate of 4.1% from the last full quarter preceding the coronavirus pandemic.” Notably, however, this aggregate savings bump is not equal across racial and ethnic groups, with a joint NPR, Harvard, and Robert Woods Johnson Foundation survey finding that “at least four in ten Latino, Black, and Native American households report using up all or most of their household savings” during the pandemic. Nevertheless, the aggregate personal savings bump has provided many workers who are in between jobs with some breathing room as they hold out for better opportunities.

While increased savings provides a small cushion, it is likely that this worker advantage will not last long, particularly given persistent inflation. Likewise, as supply chain issues are ironed out and consumer demand (particularly for durable goods) stabilizes, employers and employees will establish a new equilibrium, one that will likely again tilt toward employer power at the expense of workers. And though higher wages and more flexible hours are worthy goals, workers should use the potentially narrow window of power they have right now to ensure their job security against a looming threat: the new era of automation.

The robots are coming for workers’ jobs

During their labor dispute this year, Kellogg reportedly threatened its workers that it would “send additional jobs to Mexico.” The issue of offshoring work was also a driver of the Nabisco dispute.

While President Joe Biden vowed to be the “strongest labor president” the nation has ever had, some commentators argue that his progressive policies are driving up labor costs and resulting in accelerated outsourcing and automation, while also threatening domestic tech jobs through more generous immigration policies. Of course, arguments about the effects of the administration’s agenda are often politically motivated for both supporters and critics, and voices on the left such as the Center for American Progress are quick to counter-argue that the agenda will save jobs by discouraging offshoring. Meanwhile, a recent Wall Street Journal article reports that many CEOs are responding to supply chain weaknesses by pushing to onshore more production, even if it is less efficient. Another recent thread in this debate is the concept of allyshoring—developing supply chains with some of America’s known allies, with benefits of not only increasing the reliability of critical supply chains across sectors but also restoring foreign policy ties.

The balance between onshoring and offshoring may ebb and flow with changes to the political economy, but one thing that is certain: Automation will continue to increase across sectors regardless of who is in office. A recent Associated Press article highlighted how the pandemic accelerated automation in the past year, as robots cannot get sick nor will they request time off—a trend that replaces service sector jobs once considered safe due to demand for human contact. “Striketober” is also a likely contributor to this acceleration; as Jeff Burnstein, president of the Association for Advancing Automation, explained, “While advances in robot technology, ease of use, and new applications remain key drivers in robot adoption, worker shortages in manufacturing, warehousing, and other industries are a significant factor in the current expansion of robot use that we’re now seeing.”

Similarly, a recent Brookings analysis detailed three reasons why the pandemic is expected to accelerate the pace and scope of automation: (1) the desire of companies to cut costs by transitioning from human workers to machines for automatable tasks; (2) stalled international travel and the United States-China trade war; and (3) increased labor demand and labor costs resulting from the reshoring of jobs. Further, some businesses, particularly fast food restaurants, found that automated operations were attractive to consumers because they reduce the need for human contact with food during the preparation process.  In Ohio, Lee’s Famous Recipe Chicken installed an automated voice system in several locations to take orders, eliminating the need for a person at the drive-through window.

While automation provides cost savings and increased production opportunities for businesses, it has varying impacts on workers, from increased productivity on the positive side to eliminating the need for humans to complete routine tasks on the negative. As expected, the impact of automation on workers is not uniform across racial groups: “Black and Latino workers account for 13% and 18% of the U.S. labor force, respectively, but are overrepresented in jobs with a high risk of being eliminated or significantly changed by automation,” Brookings found.

For these vulnerable workers to thrive in a future of automation, strategic adjustments in union participation and activism, education, and worker training will be necessary to protect current jobs and create additional pipelines to jobs that are less susceptible to automation. And since firms frequently recapture the costs of training programs, either partially or fully, through productivity gains unlocked by upskilled workers, it is only right that firms increase their investments in training initiatives. This is where workers and unions can use today’s leverage and momentum to ensure continued employment into an uncertain, automated future.

Now is the time for workers to secure long-term prosperity

Since the earliest days of the knowledge economy, pundits have called for workers to refit themselves for today’s jobs. But as our team recently told workforce development leaders in Alabama, we cannot just tell workers to “learn to code,” thereby shifting all the expense and risk onto employees while all the gains from upskilling flow to employers. Instead, employers themselves need to shoulder the responsibility and at least some of the cost to help equip their workers for tomorrow’s jobs in an era of automation.

As organized labor celebrates well-deserved victories in Striketober and beyond, labor activists need to ensure that short-term wins don’t lead to long-term losses. Given that the current moment of worker leverage will be fleeting, it is imperative that the labor movement makes the most of this opportunity by pushing employers to cover the costs of upskilling, thereby ensuring long-term job security for workers.

      

The Bureau of Labor Statistics’ (BLS) November jobs report, released December 3, provides mixed news about the state of the nation’s economic recovery. Total nonfarm payroll employment increased by 210,000 jobs, compared to October’s increase of 531,000, and unemployment decreased by 0.4%, to 4.2%. BLS reports that “nonfarm employment has increased by 18.5 million since April 2020 but is down by 3.9 million, or 2.6 percent, from its pre-pandemic level in February 2020.”

Most of the job gains for November occurred in professional and business services, transportation and warehousing, construction, and manufacturing. The COVID-19 pandemic continues to negatively affect service industries, particularly retail trade, which saw a decline of 20,000 jobs in November. Some of this decline is offset by gains in food and beverage stores (9,000 jobs added) and building material and garden supply stores (7,000 jobs), but retail trade employment remains 176,000 jobs lower than in February 2020. Employment in leisure and hospitality remained largely unchanged in November, and the industry is still down by 1.3 million jobs, or 7.9%, compared to February 2020.

While health care employment was largely unchanged, nursing and residential care facilities lost 11,000 jobs. The BLS report further notes that health care employment is down 450,000 jobs since February 2020, with most of those losses concentrated in nursing and residential care. This job loss is likely accelerated by worker burnout and the vaccine mandate for employees.

Though the overall economic picture in the jobs report is slightly positive, there are sharp racial disparities in terms of employment. The biggest item to note is the dramatic drop in the number of Black women in the labor force—a phenomenon likely driven by ongoing disruptions to child care. Beyond this change to labor force participation, ongoing concerns include the effects of inflation and the uncertainties of the pandemic with the arrival of the Omicron variant.

An alarming loss of Black women in the labor force

Table 1 shows the unemployment rate by race for the three-month period between September and November. The data shows a downward trend in unemployment for all racial groups, though there are still large disparities between groups throughout the three-month period. Black workers saw the largest drop in unemployment in November.

Table 2 shows the U.S. unemployment rate by race, gender, and age from November 2020 to November 2021. Even in the face of an overall positive trend in the employment situation, November saw an increase in the unemployment rate for Black teens (ages 16 to 19): from 16.1% in October 2021 to 21.9% in November 2021, a rate that is 12.6 percentage points higher than the current rate for white teens. Black teens have the highest 13-month average unemployment rate, at 17.15%. Jobs in retail and hospitality—the primary employers of teens—have been negatively impacted by the pandemic. Restaurants and retail outlets have reopened but are struggling to hire and retain adult workers; this provides employment opportunities for teens, yet these opportunities do not appear to be benefiting Black teens.

Meanwhile, the return to in-person school instruction has coincided with an alarming increase in Black women exiting the labor force. Between October and November, the labor force participation rate for Black women dropped to 60.3%, effectively erasing the impressive gains reported in August. This 1.5 percentage point dip represents a weakening attachment to the workforce for Black women in recent months: 181,000 of them have exited the workforce since September, with more than half (91,000) exiting in November alone. This reversal in labor force reentry is unique to Black women, as women in other racial-ethnic groups continued to regain their footing in the workforce.

Increasing vaccination rates among children will be instrumental in supporting the economic recovery for Black women. However, vaccines need to work in tandem with targeted economic policies that create on-ramps to the job market for women—particularly, Black women with child care needs.

The nation’s child care infrastructure is in a fragile state, after recovering 90% of its workforce relative to February 2020. Roughly 108,000 workers are still missing from this sector, where women dominate the workforce and wages skew toward the lower end of the distribution. Furthermore, child care center failures add to the recovery’s unevenness; this is particularly true for local communities grappling with the loss of child care centers. A Columbia University study tracking child care center closures estimated that Black, Latino or Hispanic, and Asian American families were disproportionately exposed to child care facility closures, and that a considerable number of these closures may be permanent.

New policies need to confront the multiplicity of challenges impeding Black women’s return to economic well-being. Labor shortages have driven larger employers to lure workers with higher wages; while this is welcome news for workers broadly, smaller child care operators cannot compete for employees with wages, flexibility, benefits, or lower hiring requirements. Furthermore, inflationary headwinds complicate the economic environment for child care operators looking to attract new workers and capital sources to reopen community-based centers.

Wages are increasing, but inflation is taking its toll

Pandemic-induced labor shortages have given workers more leverage, while their earnings have increased at the fastest pace in 40 years. However, price inflation is negating many of those higher wages.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 6.2% between October 2020 and October 2021 before seasonal adjustment—the largest one-year increase since the period ending November 1990. Between September and October 2021, the CPI-U increased 0.9%. According to BLS data, average hourly earnings for all employees increased 0.4% during the same period. And when inflation is taken into account, real average hourly earnings decreased 0.5% in October.

While average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents (to $31.03) in November, and average hourly earnings of private sector production and nonsupervisory employees rose by 12 cents (to $26.40), these gains have largely been washed out by inflation.

The Federal Reserve considers policy changes

The renomination of Jerome Powell to lead the Federal Reserve suggests that the Biden administration is looking to reassure markets in the face of lingering inflationary pressures. In recent comments to the Senate, Powell signaled that the Fed is worried inflation will persist for longer than initially expected, and suggested that it will taper off asset purchases sooner than expected. While the markets responded well to the news that Powell would be renominated, his comments on inflation sparked concern.

Though several high-profile progressives opposed Powell’s renomination, they are likely excited about the nomination of Lael Brainard to the role of vice chair. In a speech given earlier this year, Brainard emphasized the importance of inclusive indicators and the goal of full employment: “The headline unemployment rate by itself can obscure important dimensions of labor market slack, so it is important to…consult a broad set of aggregated and disaggregated measures.” She also noted that tighter labor markets can improve equity, saying “groups that have faced the greatest challenges often make important labor market gains late in an expansion.”

A new COVID variant, and renewed economic uncertainty

As we face another pandemic winter, the World Health Organization has recently identified a “variant of concern” which they’ve named Omicron. Commerce Secretary Gina Raimondo expressed concern about the potential impacts of the variant for the labor market: “It’s too soon to tell, but I do think it’s real—not just because of the outbreaks, but because of people’s fears to show up. It’s massively disruptive.”

The Biden administration has announced several measures in response, including expanded at-home testing, continued mask mandates while flying or on public transit, and updated travel requirements for those entering the country. The administration is also continuing to encourage all adults to get a vaccine booster shot.

As we prepare for the holiday season, Omicron and other factors are still fueling great uncertainty in the broader economy in terms of labor markets, supply chains, and consumer behavior. The low unemployment rate continues to underscore the significance of the economic recovery, but the still high unemployment rate for Black workers and the dropping labor force participation rate for Black women serve as reminders that we are still far from a full recovery.

      

In 2018, the state of New York committed an unprecedented investment—$65 million—to a new place-based initiative to revitalize Buffalo’s East Side. There is perhaps no place in the region where wealth generation is more important: People of color make up 80% of the East Side’s population, and decades of disinvestment have left residents with limited opportunities for economic mobility.[1]

Our team at the University at Buffalo Regional Institute (UBRI) became involved in the initiative, knowing we had to keep our promises to a place that had been overlooked and underserved for too long. This was a major investment opportunity and needed to be undertaken differently than what was done in the past. Most notably, the community’s voice and vision had to be at the heart of the change.

Leveraging state, private, and philanthropic investment in targeted areas

Buffalo’s East Side is characterized by significant structural obstacles to growth as well as significant potential. Ninety-five percent of the population lives in a neighborhood of concentrated poverty. Of the nearly 70,000 working-age adults, over 30,000 are unemployed or out of the labor force.[2] But with 1,650 acres of vacant land and 850 vacant commercial addresses concentrated around commercial corridors, there is substantial opportunity to plan for development that connects residents to opportunity.[3]

Part of the state’s Buffalo Billion Phase II strategy, the $65 million East Side Corridor Economic Development Fund was allocated to inspire transformational capital investments in nine target areas on the East Side (Figure 1). Seeing the opportunity to leverage and complement this state-led investment, 14 private and philanthropic organizations pooled an additional $8 million to support the operations, capacity-building, and community infrastructure needed to maximize community benefit from and ownership over the East Side’s revitalization.

The result, East Side Avenues brings together public and private funders, community-based organizations, consultants, and the city to plan and coordinate the many revitalization activities aimed at improving economic conditions on Buffalo’s East Side. Our role at UBRI is to lead implementation, reach out to community members, analyze past investments, and create a comprehensive plan focused on projects that are critical for promoting economic activity.

Figure 1. East Side Avenues’ nine target areas

Building a revitalization strategy starts with resident engagement

To determine what investments could shape the future of the nine target areas, the East Side Avenues planning team—consisting of UBRI and Empire State Development staffers—wanted to hear from residents first. We held four stakeholder meetings with hundreds of participants, accessible to each of the corridors on the East Side. Outreach was targeted but also inclusive—we reached out to nonprofit community associations, business associations, block clubs, and faith-based organizations.

Throughout this resident engagement process, no idea was a bad idea. There wasn’t some 20-page application; instead, we asked residents for one page that described an idea, how far along it was, and its cost. Anyone who submitted an idea was offered a listening session—a chance to informally share their vision with the planning team. Over 100 submissions came in and community members requested 42 listening sessions. It wasn’t “Shark Tank”—our team was there to listen and learn.

We met incredible people who shared their visions. One mixed-use building owner dreamt of a new coffee shop; a beautician imagined a first-floor shared business space and upstairs apartments; and a family wanted to transform their business into an incubator for entrepreneurs. Patterns emerged from the conversations: Residents felt that community anchors and historic places were critical to the neighborhood’s success. Property and small business owners had great ideas but needed help implementing them. It would take a mix of new training opportunities, access to capital, and strengthening community assets to achieve their goals.

But when we began to talk about millions of dollars of investment, concerns about displacement also emerged. We needed to ensure the success of East Side community members and give them opportunities to build and grow on their own terms.

A five-part initiative to build community power and ownership

Based on the patterns of need that emerged from our conversations with the community and partnerships with nonprofit community-based organizations, we designed five strategic programs to address the East Side’s capacity gaps and fuel inclusive economic growth. These strategic programs include funding to:

• Renovate buildings in East Side commercial corridors
• Stabilize historic buildings at risk of further deterioration or future demolition
• Transform a predominantly Black corridor into a unified tourist destination
• Reactivate the historic Central Terminal
• Provide training for East Side residents and building owners in commercial real estate development while increasing access to capital

Over the next five years, we will expand the capacity of existing community-based nonprofits to implement all five programs and ensure work is driven by community priorities.

Resident developers are a building block of community ownership

Of the five programs above, the final one—the Community-Based Real Estate Development Training program (CBREDT)—is emblematic of how residents, businesses, and property owners can be empowered to invest in their own assets, start or expand their own businesses, and grow wealth.

The first of its kind in the region, we developed CBREDT as a tuition-free, non-credit-bearing, 23-week adult education program that provides East Side residents and building owners with an overview of commercial real estate development (including predevelopment, construction, and project financing), offers weekly lectures and hands-on activities by local professionals, connects students with mentors, and guides students toward a final project presented to a panel of jurors. The program is modeled off of other training programs like LISC’s ACRE program in Milwaukee and the University at Buffalo’s Real Estate Development program, but tailored based on input from a local workgroup of partners consisting of LISC Western New York, the city of Buffalo, potential program participants, existing East Side developers, community development corporations, and faith-based organizations.

We received 154 applicants, with 20 applicants each accepted into our first two cohorts. Largely due to COVID-19-related complications, 15 students completed the program in 2020 and 19 in 2021.

“This is an opportunity for people to learn about their city and East Side revitalization efforts and for people of color to advance to the next level.”

 

Leah Angel Daniel, 2021 CBREDT graduate

Our ultimate goal is to give East Side building owners and community members the know-how to undertake a commercial redevelopment project. We wanted to ensure revitalization is driven by the community, and buildings don’t sit unused or fall into the hands of absentee landlords or speculators. To bolster participants’ chances at success, Empire State Development established a $5 million fund to provide program graduates access to much-needed capital. Many students are moving forward with their projects, including building out space for a small business, renovating a family-owned 2,000-square-foot, three-unit property, and pursuing historic tax credits for a 90,000-square-foot mixed-use facility.

We’re planning a third CBREDT cohort for early 2022.  We also offer continuing education and networking opportunities to graduates and check in on their development projects and readiness to apply for funding.

“This program made me confident that I can truly be a commercial developer. I feel privileged to have been a part of this incredible learning experience and to have connected with so many talented professionals.”

 

Brandi Barrett, 2020 CBREDT Graduate

Starting and ending with community voices

From the outset, East Side Avenues committed to elevating the voices of the community. And the best way to hear about a program’s results is directly from participants, so we continue to share CBREDT participants’ stories and promote their visions to inspire others.

East Side Avenues starts and ends with community voices, and is fueled by collaborative multiyear support from Empire State Development and 14 private funders to ensure we have the resources to succeed. We built the model together, are implementing it together, and continue to grow the economy, learn, problem-solve, and scale together.

Notes

[1][2] UBRI analysis of data from U.S. Census Bureau, American Community Survey 5-Year Estimates (2012-2016).

[3] U.S. Postal Service, HUD Aggregated USPS Administrative Data on Address Vacancies, 4^th Quarter (December) 2017.

      

This November marked the annual Hunger and Homelessness Awareness Week­—aptly timed to coincide with the season of giving, celebrations of harvest plenty, and, in much of the country, the arrival of the cold, cruel weather that makes homelessness perhaps ever so slightly more in the conscience of those who don’t personally have to worry about it.

This might be particularly true this year, given the “devastating” recent national surge in people experiencing homelessness who are occupying public spaces (also known as “unsheltered”). As downtowns struggle to recover from the COVID-19 pandemic, the “tent cities” and “encampments” that have filled spaces once busy with office workers have become tangible symbols of the virus’s crushing effects. Americans and foreign visitors alike have been shocked by the scale of unsheltered homelessness in our cities, and the limits of our current structures of governance—at all scales—to solve it.

Given the fractured nature of the American landscape, we shouldn’t be so surprised. While the roots of—and ideally the remedies for—homelessness are expansive across both systems (e.g., health care, housing, workforce) and geography, the visibility of—and hence the unspoken responsibility for—unsheltered individuals is largely confined to the parks and plazas where they congregate and the organizations that manage those spaces. This mismatch perfectly illustrates the perils of the country’s entrenched patterns of segregation—and why reimagining governance is key to dismantling it.

Segregation has blinded many Americans to the homelessness crisis

In the nearly seven decades since the Brown v. Board of Education decision struck down the farcical notion that Black and white Americans could be “separate but equal” in the eyes of law and society, segregation in the U.S. has increased in spatial scale and expanded to include separation by income and land use type. Thus, even as the country has become more racially diverse, it is still mostly segregated by race at the neighborhood level, and even as overall poverty declined, concentrated poverty has gotten worse. Meanwhile, different land uses such as houses, apartments, stores, and offices are farther apart than ever.

This segregation inevitably produces unequal outcomes and has helped create the ongoing homelessness crisis. Wealth and opportunity are hoarded in some neighborhoods while poverty is concentrated in others. Between neighborhoods, low wages and high costs produce a shortage of affordable housing, while inadequate social systems—including unemployment insurance, mental health treatment, and the criminal justice system—let many people fall through the cracks. But across the huge land areas required to segregate a growing population by race, income, and land use, most people are safely distant from having to actually see any manifestation of this inequality, much less feel accountability for it.

Simply put, the near invisibility of the unsheltered for many Americans is due to the fact that not every place sees homelessness to the same degree. Because people experiencing homelessness are drawn to the most highly accessible locations to meet their needs (to public spaces where they retain some rights and to visible hubs that may provide some sense of security), most places have no homeless people and a few have a lot. The upshot of these distributional issues is that there is tremendous pressure on only a small number of people and places to “solve” homelessness, even when the causes are systemic.

This status quo is not inevitable and does not have to remain permanent. As Brookings’s Hanna Love and Jennifer S. Vey note, the COVID-19 pandemic has made the limits of quarantine, isolation, and separation policies painfully obvious. Instead, we need to reform, invest in, and break down silos between federal, state, and local governance systems—from housing to health care—that can help prevent homelessness. But we also need to evolve a new generation of hyperlocal place governance organizations that are often already working in the spaces and communities where people experiencing homelessness gather—and who can more intimately see, understand, and help respond to the crisis.

Place governance is key to addressing homelessness

Historians and sociologists have long noted that the end of state-enforced de jure segregation in the civil rights era was replaced by a new reality of de facto segregation enforced by privatization and markets. This privatization includes entire geographic areas smaller than any public general purpose government (such as a county or most municipalities). Neighborhoods and places are increasingly governed by structures like private homeowners associations, quasi-private business improvement districts (BIDs), or even technically public suburban micro-municipalities created through defensive incorporation—places like Highland Park, Texas (which is completely surrounded by Dallas) or Beverly Hills, Calif. (surrounded by Los Angeles).

There has clearly been significant demand for expanding this sort of hyperlocal governance capacity. In addition to the massive proliferation of homeowners associations, special districts like BIDs have rapidly expanded to the point where they are now almost as common as general purpose local governments (Figure 1). While these organizations typically engage in important community functions the public sector won’t or can’t take on—from maintaining and programming public spaces to small business assistance and beyond—many have also faced widespread challenges to their legitimacy, transparency, accountability, fairness, and capacity, particularly when it comes to the homeless or other marginalized populations. For example, some BIDs have been criticized for displacing people experiencing homelessness under the guise of claiming to help. Others have been criticized for not intervening enough. In the name of defending public space for shared use by all rather than occupancy by a few, place governance organizations have often failed to strike a balance that allows public spaces to work for everyone.

While sometimes framed as incompetence or even malice, the fact is that there is a wide gap between the outsized responsibility many of these organizations bear to address homelessness (given the hyper-segregation of those experiencing it) and the capacity of these entities to do so given the scale and complexity of the challenge. Yet they are also uniquely positioned to help bridge that divide—to reach across, rather than exist within, boundaries typically erected by sector (e.g., real estate or service provision) and geography (e.g., neighborhood, tax district) to create a more integrated and inclusive service system that meets individuals who are unsheltered where they are. Some organizations are already taking this approach. For example, in 2018, Central Atlanta Progress and the Atlanta Downtown Improvement District hired a dedicated case manager focused on addressing the holistic needs of the unsheltered in and around Woodruff Park, building on other efforts to address homelessness in the area. And in San Francisco and Los Angeles, Urban Alchemy employs people with their own lived experience related to homelessness to engage and assist the unsheltered to improve safety and maintenance of public spaces for them and for other users. Still, most regions lack a comprehensive strategy to address homelessness that coordinates social service providers, housing agencies, healthcare and other city agencies with place-based organizations and public space managers—strategies that could help facilitate the transition of  unsheltered individuals in public spaces into an appropriate Continuum of Care, and ultimately, into stable housing. Big metropolitan areas can contain a dozen or more Continuums of Care, and most do not include public space managers.

Elena Madison (Project for Public Spaces) and Joy Moses (National Alliance to End Homelessness) will discuss these issues in depth in their forthcoming chapter of “Hyperlocal: Place Governance in a Fragmented World,” to published by Brookings Press this spring. Through seven additional chapters written by authors from around the country, the book examines both the tensions and benefits associated with governing places in an increasingly fragmented—and inequitable—economic landscape. It provides nuanced insight into the role place governance plays in both contributing to and combating place-based socioeconomic inequities. Finally, it highlights how we can create and sustain more effective and inclusive place governance structures that support all members of a community—to not simply survive, but to thrive.

      

Last week, the House of Representatives passed the Build Back Better Act, which boasts an array of social and climate programs, ranging from generous support for child care, paid leave, and new health benefits to renewable electricity tax credits.

Democrats are trumpeting the vote as a major milestone, although the bill’s passage is only a waystation en route to a tougher showdown in the Senate.

Yet beneath the bill’s main events resides something else important: an impressive collection of “place-based” programs targeted at helping particular places and their residents thrive, rather than helping people more generally wherever they live. Tucked into the $2.2 trillion bill are numerous place-based programs aimed at combating the nation’s epidemic of uneven development, with spatially targeted funding that would promote a more equitable distribution of economic growth across the country.

Some of the pending place-oriented programs would boost the nation’s regional innovation capacity by investing hundreds of millions of dollars in regional tech hubs, manufacturing institutes, and regional industry clusters. Others would provide block grants so distressed labor markets can expand employment opportunities. And still others would channel multiyear investments into communities to help with energy and industrial transitions, community revitalization, and rural partnerships.

An initial count finds more than 30 place-centric programs in the legislation that would fund translational research at universities; bolster supply-chain resilience around ports; accelerate the deployment of low- and zero-emissions technologies; promote rural prosperity, establish incubator spaces for Main Street small businesses in underserved communities, and provide funding for Indigenous communities. Add it all up and these items—mostly unheralded in media coverage of the package but major in the history of U.S. place-based policy—represent a genuine breakthrough for the growing recognition that smart investments aimed at strengthening the economies of particular regions or localities can enhance overall welfare and prosperity.

For much of the postwar 20th century and into the 2000s, federal policy discussions looked askance at place-based policy while minimizing the problems it aimed to address. During the early postwar period, market forces reduced job, wage, investment, and business formation disparities between regions and (to some extent) neighborhoods; for example, as the South began to catch up economically with the rest of the country.

Given that, the economic and policy mainstream felt it could trust what it believed was the self-regulating and benign nature of the market’s impacts across different places and communities. Consequently, Washington, D.C. and economic elites remained skeptical of ideas that would counter the nation’s spatial divides, belaboring the mixed record of early place-based interventions that directed resources toward particular geographic areas.

Yet even as policymakers maintained their faith in the self-regulation of the market, it was no longer operating in the way they talked about it. Since the 1980s, and with intensified force in the last decade, regional and neighborhood fortunes have ceased converging and have been sharply diverging, with disastrous impacts on thousands of urban and rural communities.

The results of the 2016 election underscored the nation’s geographic crisis and prompted a surge of place-oriented research from scholars at Brookings, including Brookings Metro, the Hamilton Project, and the Center for Sustainable Development, as well as scholars at other research organizations such as the Economic Innovation Group, Harvard University, the Washington Center for Equitable Growth, the Aspen Institute, and the Massachusetts Institute of Technology, among many others.

That welcome burst of attention, paired with advances in the theory and practice of place-based economic development, has led to a broad reassessment of the gravity of the nation’s geographical divides, the need to respond, and the possibility of success. Reflecting that, the Build Back Better Act represents the most significant American embrace of place-based ideas since the Great Society—or maybe even the New Deal. In short, if the act is passed, it will launch a major new period of place-focused investment and local problem-solving.

Of course, success is not guaranteed. To begin with, the House bill’s place-based and related prosperity provisions must survive a tough gauntlet in the coming weeks. That’s because the House bill now heads to the Senate, where getting to “yes” might require paring back various provisions—although one would think the place-based elements would be especially pertinent to states like West Virginia and Arizona, home to the bill’s main Democratic critics, Sens. Joe Manchin and Kyrsten Sinema.

Beyond that, the new place-based policies will face numerous implementation challenges. Depleted federal agencies will need to renew their proficiency at program design and rulemaking to ensure any new place-based proposals are well crafted and user-friendly. Smart rulemaking and design detail will be particularly important given the mixed record of some earlier place-based efforts.

Potentially even more challenging will be getting resources to the highly distressed and underserved communities that need them the most. Such targeting is a key point of many place-based initiatives, yet many of the most appropriate recipients of place-based investment possess limited capacity to package their ideas and navigate the requirements of federal programs. Federal agencies will need to be creative and energetic in providing upfront support for community program applicants and watch that program criteria do not create inadvertent barriers for the worst-off places.

And then there is the need to show results quickly, amid both the current political atmosphere and a legacy of skepticism for place-based policies. Given those factors, it will be important for the federal government and local stakeholders to get success measures from the outset, manage the fact that place-based development takes time (several years at a minimum), and work hard to deliver excellent outcomes and communicate them widely.

With all of that said, the Build Back Better Act as passed by the House must be counted as a major advance for national policy that acknowledges regional and neighborhood decline and seeks to counter it with a new generation of place-based responses.

Addressing regional inequality will absolutely require the kind of universal social programs that compose the bulk of the Build Back Better Act. Such broad welfare programs represent an important revival of the federal government acting as a “pro-active force for uniting disparate regions into one national economy,” as notes the sociologist Robert Manduca. Yet in addition to such universal investment, a true push to ameliorate the nation’s stark geographic divides can and should reinvestigate the power of targeted, place-oriented policies to reverse local distress and catalyze growth. The House version of the Build Back Better Act represents a major watershed for that work. Let’s hope the Senate embraces it too.

      

This time, it really was Infrastructure Week. On November 15, President Joe Biden signed into law the first comprehensive infrastructure bill in a generation, including over $500 billion in new spending to upgrade broadband, roads, bridges, public transit, energy, clean drinking water, and other infrastructure systems.

While the bill is ambitious, it still misses important opportunities to modernize state and local governments. Without that focus, a large percentage of the funding in the enormous bill will inevitably be spent on the same types of projects we’ve been building for the last several decades—not the transformative projects we need.

Building those kinds of transformative infrastructure projects will require modernizing workforce development systems and procurement techniques. Unfortunately, the infrastructure bill doesn’t do enough to help state and local partners with these essential inputs. If the nation wants generational impacts, we can’t afford to overlook operational capacity.

State and local governments—cities, counties, water utilities, airport authorities, and school districts—will be the primary partners in executing the bill’s provisions. But in our organization’s work with thousands of local leaders across the country, including a May 2021 survey of over 600 local government officials and staff, we’ve discovered that if the federal government doesn’t also support their operational capacity, state and local governments face enormous workforce and procurement challenges that could prevent them from making the most out of this influx of federal funding.

Current state and local government workforces are not well equipped to implement the types of projects and programs included in the infrastructure bill. That’s even more true in the context of the accelerated project timelines that will likely accompany federal funding. The labor shortage is causing economic fallout across industries, from top technology firms to McDonald’s. What is not discussed in the context of the infrastructure bill is that those same economic forces apply to state and local governments.

According to Bloomberg, 780,000 government jobs remain vacant compared to pre-pandemic levels. State and local governments are in the midst of a COVID-spurred hiring crisis exacerbated by the already-occurring “silver tsunami.” The two trends are locked in a negative feedback loop; when we surveyed local government officials and staff in May, 44% of respondents said COVID-19 accelerated the rate of retirements. That same survey found that CARES Act funding didn’t address the issue—local governments spent the money on existing payroll to avoid layoffs. Furthermore, 28% of respondents expected reduced staff capacity due to COVID-19 to be permanent.

It’s not that there aren’t workforce provisions included in the infrastructure bill—there are. For example, there is a requirement for states to develop “human capital plans” for transportation infrastructure, as well as funding in many of the proposed programs for workforce training and development. But none of the included provisions address the wide-ranging hiring and retention crisis that is affecting nearly every state and local government entity across every infrastructure type—transport, water, electric grid, telecom, etc.

Federal agencies should consider how to help state and local governments recruit and retain the workers they need to design, plan, build, and maintain the transformative projects the infrastructure bill seeks to support. For example, state and local governments would benefit from technical and financial assistance to leverage areas where they can offer competitive advantages to workers, especially training and professional development. These efforts are especially important in the context of low morale; 82% of respondents to our survey said morale was negatively affected by COVID-19. Meanwhile, many state and local governments struggle to make temporary work-from-home and other flexible arrangements permanent.

There are localized examples of state and local governments creating upskilling programs to retain workers. For example, Utah’s Department of Technology Services successfully did so for notoriously hard-to-retain technology workers. The Biden administration should consider a program to scale efforts like these, especially for essential and competitive positions such as electricians and niche construction workers.

Realistically, though, no amount of assistance from the federal government will help state and local governments completely overcome the market dynamics that make workforce challenges so difficult. Would it be possible, then, for federal agencies to create “circuit riders” programs for specific initiatives like electric grid modernization or broadband? In the 17th and 18th centuries, circuit riders were clergy or judges assigned to travel around specific geographic territories and deliver sermons or settle disputes. Since then, the term has been used by the federal government and nonprofits, including the National Rural Water Association, which gave rural water utilities access to expert technicians in the 1980s, as well as by regional governments including the Delaware Valley Regional Planning Commission, which gave local governments access to energy efficiency experts as recently as 2014.

The program could be modeled after nonprofit initiatives like Bloomberg Philanthropies’ What Works Cities or the Rockefeller Foundation’s 100 Resilient Cities—but with the stability of the federal government—and create cohorts of experts and highly skilled workers to help low-capacity state and local governments execute on specific priorities in the infrastructure bill. Barring workforce development provisions like these, small and medium-sized local governments will outsource much of the execution work to the private sector or miss out on opportunities for funding entirely.

Workforce development is not the only important challenge that requires dedicated strategies and resources. Modern, flexible procurement strategies are also required to transform the way infrastructure is built.

Government procurement — the process of buying services and products like smart sensors, microgrids and flexible flood barriers — is often a stumbling block toward innovation. Even when a city knows what it needs, public procurement processes are often biased against new, cross-cutting, or resilient solutions. If we don’t make major improvements to the procurement tools that government agencies are required to use, agencies at all levels will inevitably replace failing systems with the same old fixes rather than transitioning to better, cheaper, more sustainable systems.

Building safer, smarter, and more sustainable water, transportation, and energy systems requires going beyond traditional purchasing processes that enable the development of existing legacy infrastructure. Standard pre-development and procurement processes will not help cities pursue innovative outcomes, regardless of how much money federal leaders throw at the country’s infrastructure challenges.

There are some narrow procurement measures included in the infrastructure bill, such as a requirement that the Department of Transportation create a rule for the Active Transportation Infrastructure Investment Program that “encourages the use of the programmatic categorical exclusion, expedited procurement techniques, and other best practices to facilitate productive and timely expenditures for eligible projects that are small, low-impact, and constructed within an existing built environment.” But the provisions for procurement are limited and narrowly scoped.

The administration should reconsider running an “Infrastructure Grand Challenge” that would develop innovative projects, technology, financing, and policy structures to fundamentally transform how infrastructure is built—an idea originally included in the administration’s infrastructure investment plans but abandoned in the current version. Rather than waiting on a top-down solution or for dynamics to shift in a traditionally slow-moving sector, a challenge format can rapidly encourage a range of innovations that are responsive to urgent infrastructure needs. Prize competitions in both the public and private sectors have strong precedents for advancing technology (e.g., the XPRIZE competition), connected community development (the Department of Transportation’s Smart Cities Challenge), and large-scale project development (the Army Office of Energy Initiatives).

Given the infrastructure crisis our nation faces, we cannot afford any missed opportunities. The amount of funding in the infrastructure bill comes along once in a generation; we must do everything possible to ensure maximum impact. Instead of continuing to build more of what we’ve always built, it’s imperative to build better than before—and to do that, state and local governments need the right workforce and procurement tools to leverage every dollar the federal government sends their way.

      

As U.S. metropolitan leaders return to domestic realities after COP26, the United Nations climate summit, they face a glaring contradiction.

At the Glasgow summit, leaders were bolstered by the renewed conviction that cities are centers of progress on climate action. However, they were also rebuked by waves of new research detailing massive gaps between countries’ long-term promises to zero out carbon emissions and their official near-term plans. For example, the summit was roiled last week by a Washington Post analysis showing that many countries grossly underreport their greenhouse gas (GHG) emissions—meaning that the world is relying on flawed data.

All of which underscores the need for cities and metropolitan areas to bear down and square their tremendous potential to reduce carbon emissions with new efforts to deliver. And as recent and forthcoming Brookings research emphasize, metro areas have much work to do if they are to act on the sense of urgency emanating from Glasgow.

Forthcoming work from Brookings Metro’s Joseph W. Kane and Adie Tomer stresses the need for improved measurement and data collection if the U.S. is to tap the power of capital markets to deliver more resilient outcomes, particularly for the transportation, water, and real estate sectors. This follows on their work emphasizing the importance of measuring both the costs and benefits of climate action. In the meantime, it bears looking again at last year’s Brookings assessment of the nation’s many city-based Climate Action Plans (CAPs). That work, conducted before the pandemic based on data from 2017, suggests that cities’ well-intentioned GHG emissions targets, reduction strategies, and monitoring efforts often suffer from some of the gaps, drift, and slippage of country-level commitments.

Led by Sam Markolf of the University of California, Merced and Inês Azevedo of Stanford University, the assessment looked at the 100 largest U.S. cities and found that, as of 2017, only 45 had any serious climate pledge at all—and that many of the pledges that did exist remained heavier on aspiration than reality. In this regard, about two-thirds of the pledging cities are currently lagging their targeted emissions levels, while 13 others don’t appear to have available emissions tracking in place. What’s more, only six of the plans encompass smaller communities in the bottom quartile of cities. Most glaringly, the GHG targets set by cities are mostly nonbinding, with the exception of those in California.

In short, while these efforts added up to a meaningful 6% or so trimming of total U.S. emissions in 2017, the reductions fell far short of the targets that the Intergovernmental Panel on Climate Change (IPCC) says are needed to avoid some of the worst impacts of climate change. Though additional city-based action has occurred since 2017, the story today is likely not massively different.

As to what needs to happen now, CAP activity needs to expand, with new commitments to improved data collection, measurement, and execution. In this regard, the great potential of city-based “bottom-up” climate action can be better realized if municipalities, states, the federal government, nongovernmental organizations, philanthropies, and companies work to:

• Put in place more plans. Although more than 600 local governments in the U.S. have developed CAPs that include GHG inventories and reduction targets, it’s not enough. More action is needed, especially among larger cities, but also in small ones. Consideration and action around a broader set of climate adaptation needs are also needed given the uneven and costly impacts currently hitting communities. 
• Improve the quality of pledges. Activists and politicians have focused a lot on bold announcements, which have a role to play. However, pledges need to include more focus on how emissions will be reduced, including on how those efforts will be sustained. Philanthropy may have a role to play.
• Emphasize implementation. If Glasgow underscored one thing, it’s that commitments need to be backed up with far grittier implementation plans than has been the case so far. In general, cities should put more focus on implementation than aspiration, and stress how they are turning pledges into reality. Just as how more nongovernmental organizations are doing detailed comparisons between nations’ plans, a focus on implementation should spread through cities too. Regular, rigorous monitoring, accounting, and implementation assessments should become the norm. If they don’t—and localities continue to make pledges that lack a genuine plan of action—it could quickly erode public trust.
• Improve measurement and data collection. As the management-school adage goes, only “what gets measured, gets managed.” Yet in most cities, managers are operating with flawed, partial, or nonexistent data on whether their CAPs are delivering true emissions reductions. For example, 13 of the CAPs Brookings studied lacked available GHG inventories for years after their establishment. Given that, more data and better modeling are essential. Increased use of earth observation satellites is one advancement that will soon deliver more accurate monitoring. Meanwhile, a large community of energy systems modelers with powerful tools exists, but has not for the most part been engaged to focus on cities. Beyond energy, there needs to be more consistent evaluations of related infrastructure improvements at a regional scale, as demonstrated by the Natural Capital Project. These resources and strategies should be fully leveraged, as improved measurement and data collection will be essential to change outcomes in the next decade.
• Encourage learning. To further convert aspiration into delivery, stronger mechanisms for peer review and the sharing of best practices are badly needed so that the community of activists and planners can learn—faster—what works and what doesn’t, and adjust accordingly. Part of this process must include the publication of more detailed and transparent information about what cities are trying, but it also requires systematic review and frank discussion of what is working and what is failing. Why? Because no city—by itself—really matters. Cities matter, mainly, when they learn from each other and emulate the best experiments. Then, through “followership” as much as leadership, individual city gains are multiplied into many times more progress.

In sum, cities across the country (and the globe) are poised to remain leaders in global GHG mitigation efforts over the next decade—but they will need to redouble their efforts with a new level of data-disciplined rigor. Post-COP26, a new commitment to data and delivery needs to take hold.